Improving the analysis of the author's previous report on a few points of importance, an exact analysis based on fundamental laws of dynamics and thermodynamics is accomplished on a simple but clearly defined model of compressible saturated two-phase flow. As the result, fundamental matters such as the behavior of energy within the two phases, the change of phase, the change of entropy, the variation of pressure near the exit of pipe in critical flow and others are clarified with physical distinctness. Besides, numerical computation is carried out for critical flow of the model afore-mentioned in case of water / steam system, and the results are presented. Distinction between critical flow with evaporation and that with condensation has an important effect on the analysis.