Aligning text centrally around a circle

Holly,

In addition to what Bobby said, you can only judge the perpendicularity of the whole letter because each letter is positioned and rotated as a whole, so it is the middle of the letter that counts.

The N in your sample starts with the left stem at the top, but the middle of the letter is to the right, so the whole letter ought to lean right.

You can see whether it is correct if you create a (possibly symmetrical) text with the middle a (near) symmetrical letter such as A, I, T, or H (or your N), in your sample at the top, and view that.

Or if you temporarily rotate the lettering to have the middle of one letter (symmetrical or near symmetrical) at the very top.

Text on path effects, like the common text on a circle path example you posted, are an often imperfect thing. The effect filter has to rotate each individual letter, but depending on the typeface choice and math involved the end results can end up looking pretty crooked and wacky. The shapes and geometry of some letters just won't line up with the source path properly.

Very often with effects like this it may be necessary to convert the live type to outlines and then individually fine-tune the rotation and placement of each letter along the curve of the source path.

In some cases it may take other approaches to reach a result that looks good enough. A string of lettering converted into an Art Brush can be a good alternative to a text on path effect. The process takes a few more steps, but will deliver a text effect where the lettering warps with the curve on which it is applied rather than letters merely being rotated in a not so predictable or natural looking manner. There are drawbacks to converting lettering into art brushes. Depending on the typeface choice the warping that occurs might look terrible.