Exergy is defined as the useful work available from a system in a specified environment. Exergy analysis allows for comparison between different system designs, and allows for comparison of subsystem efficiencies within system designs. This paper explores the relationship between the fundamental rocket equation and an exergy balance equation. A previously derived exergy equation related to rocket systems is investigated, and a higher fidelity analysis is derived. The exergy assessments will enable informed, value-based decision making when comparing alternative rocket system designs, and will allow the most efficient configuration among candidate configurations to be determined.