Graphic Creation

Open a new document:

Set size to 5”x5” with an eighth inch bleed. Turn on document grid under View>> Show Document Grid

Draw circle:

Choose the ellipse tool and a major intersection on the grid. Holding down the Alt/Option and Shift keys draw a circle from the center out with a one inch radius. You could also draw any size ellipse and select it. Using the upper left proxy handle in the Control palette type in X:1, Y:2, W: 2, and H:2 Either one will give you a two-inch circle.

Place type on circle:

Choose the Type on a Path tool and click on the circlular path.

Draw new circle:

Make this one the same way as the last one, but make it 2.5" centered around the first circle. Choose Object | Arrange | Send To Back. Make a radial gradient with the new Gradient Swatch command off the Swatches palette -- colors are your choice -- and fill the new circle. Add a half-point stroke of black. Select the type and color it something light.

Draw rectangle:

With the rectangle tool, draw a rectangle that is one inch tall and three inches wide. Fill it with a linear gradient of your choice. Use a stroke of None. Select the path with the Direct Selection tool. Using it and the Pen, as necessary, make the rectangle into a wave shape. I had to drag out the handles with the Convert Point tool and then click on the handles with the same tool to get the shape I wanted. (If you are using Illustrator you can Envelope or Warp it)

Copy shape to produce a path with the identical curve:

Next with the Alt/Option key held down, drag a copy of the rectangle down. Select the top two points of the rectangle with the Direct Selection tool and delete them. This will produce a path that matches the bottom of the rectangle. Don't worry about the fill because you are going to attach type to this new path. then the fill will not show

Add type to the new path:

Select the type on a path tool. Click on the path with the tool. Type in Full speed ahead! In the font and color of your choice. Select the path with the Direct Selection tool and give it a stroke and fill of none. Select the path with the Selection tool and mover the type up into position. Select the banner and change it to multiply mode in the Transparency palette. It should look something like this.

Yea, it's simple. But then you do not want to spend a lot of time on tutorials.

To make it better you probably should click on the transformation center of the circular torpedo phrase. Often that center is invisible to the naked eye, but it appears next to your cursor when you hover over it (it is the upside down T you see in the top capture with the grid in back). By draggin that around the circle you can adjust the location of the type until both ends of it are the same distance above the banner.