Taking into account the finite output resistance of the transistors, we can write the load and reference currents as follows:

$I_O=K_{n2}(V_{GS}-V_{TN2})^2(1+\lambda_2V_{DS2})$

and

$I_{REF}=K_{n1}(V_{GS}-V_{TN1})^2(1+\lambda_1V_{DS1})$

Since transistors in the current mirror are processed on the same integrated circuit, all physical parameters, such as Vtn, $\mu$, Cox and $\lambda$ are essentially identical for both devices. Therefore, taking the ratio of Io to Iref, we have

$\frac{I_O}{I_{REF}} = \frac{(\frac{W}{L})_2}{(\frac{W}{L})_1} \frac{(1+\lambda_2V_{DS2})}{(1+\lambda_1V_{DS1})}$

The above equation shows that the ratio Io/Iref is a function of the aspect ratios, which is controlled by the designer, and it is also a function of $\lambda$ and Vds2.

The stability of the load current can be described in terms of the output resistance. From the circuit, Vds1 = Vgs1 = constant for a given reference current.

Normally, $\lambda$Vds1 = $\lambda$ Vgs1 << 1, and if (W/L)2 = (W/L), then the change in bias current with respect to a change in Vds2 is

$\frac{1}{R_0} \equiv \frac{dI_O}{dV_{DS2}} \cong \lambda I_{REF}=\frac{1}{r_0}$

where ro is the output resistance of the transistor. As we found with bipolar current-source circuits, MOSFET current sources require a large output resistance for excellent stability.